MITCHELL AND SANCTIONS IN THE CONTEXT OF JUDICIAL REVIEW: WAS IT WORTH THE CANDLE?

It is clear that the Mitchell principles are being applied widely. In The Queen on the Application of Royal Free London NHS Foundation Trust, Mr Justice Coulson considered the principles in the context of a late application in judicial review proceedings.

THE ISSUE

The relevant issue here is that, in the course of the judicial review proceedings, the court ordered the second defendant to pay £2,000 towards the costs of the first defendant. The second defendant did nothing within the 14 days allowed by the rules to apply to set aside the order. Further they did not comply with the order. Some six weeks outside the time allowed the second defendant applied to set aside the order.

THE DECISION: FAR TO LATE AND NO EXPLANATION MEANT NO RELIEF

No great surprise here. Coulson J observed.

In my judgment, the application to set aside and the application for relief from sanctions are both hopeless. The order was validly made; the second defendant failed to comply with it; and no justification for that failure is offered. The terms of CPR 3.9 are as follows:

“Relief from sanctions

3.9

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.

(2) An application for relief must be supported by evidence.”

As is well known, the Court of Appeal has recently provided guidance on this new rule in Andrew Mitchell MP v News Group Newspapers Limited [2013] EWCA Civ. 1357. In his judgment, the Master of the Rolls said:

“41. If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason. Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal. But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.

…

45. On an application for relief from a sanction, therefore, the starting point should be that the sanction has been properly imposed and complies with the overriding objective. If the application for relief is combined with an application to vary or revoke under CPR 3.1(7), then that should be considered first and the Tibbles criteria applied. But if no application is made, it is not open to him to complain that the order should not have been made, whether on the grounds that it did not comply with the overriding objective or for any other reason. In the present case, the sanction is stated in CPR 3.14 itself: unless the court otherwise orders, the defaulting party will be treated as having filed a budget comprising only the applicable court fees. It is not open to that party to complain that the sanction does not comply with the overriding objective or is otherwise unfair. The words “unless the court otherwise orders” are intended to ensure that the sanction is imposed to give effect to the overriding objective. As we have said, the principles by which the court should decide whether to order “otherwise” are likely to be the same as the principles by which an application under CPR 3.9 is determined. In most cases, the question whether to relieve a party who has failed to file a costs budget in accordance with CPR 3.13 from the CPR 3.14 sanction will therefore be dealt with under CPR 3.14. That did not happen in the present case. That is why the question of relief from sanctions was dealt with under CPR 3.9.”

In this case, although there was a late statement from Miss Jarrett, and a skeleton argument from Miss Scolding, neither of those documents set out how and why the court ought to allow the second defendant to challenge and go behind Judge Thornton’s order, six weeks out of time.

In her oral submissions, which were again both clear and realistic, Miss Scolding accepted that there were difficulties with the second defendant’s application. But she argued that, because there was a statement from Miss Jones of the claimant, dated 16 October, which dealt with the question of the claimant’s costs (particularly as against the first defendant), and because costs were going to be considered at this hearing anyway, it was not unreasonable for the second defendant to wait and deal with the issue of costs at this hearing. But that ignores the clear and proportionate order made by Judge Thornton. Moreover, it does not seem to me that the fact that Miss Jones was continuing with a misconceived application, to the effect that the first defendant should be paying the claimant’s costs, could have had any bearing on the second defendant’s decision belatedly to challenge the order of Judge Thornton.

Miss Scolding’s other point was that there was no prejudice as a result of the six week delay in making the application. As I am sure Miss Scolding was keenly aware, even as she made that submission, under the new terms of CPR 3.9, the question of prejudice is no longer a reason for allowing or disallowing relief from sanctions: see Murray and Stokes v Neil Dowlman Architecture Ltd[2013] EWHC 872, at paragraph 19. The emphasis now is on the need to comply with the CPR, not arguing about the impact or otherwise of a failure to comply. In any event, it seems to me that there have been various kinds of prejudice arising from the delay, including the fact that the first defendant has had to attend today to deal with this part of the argument.

For those reasons, the second defendant’s application against the first defendant to set aside the costs order of Judge Thornton is refused. Therefore the second defendant must pay the £2,000 which the judge identified. That is the only order which the first defendant seeks against the second defendant, save in relation to issues of costs arising out of this hearing which I will deal with separately.”

OBSERVATIONS

It would be a worthwhile bet that the costs in making the application to set aside the cost order actually exceeding the original costs order (of £2,000) by a fair margin. As the judge observed

“It is an unhappy fact that this hearing, and this judgment, concern relatively modest sums by way of costs which are being disputed by parties who are ultimately funded by the taxpayer.”